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AUD NZD - FUNDAMENTAL DRIVERSAUD FUNDAMENTAL OUTLOOK: NEUTRAL BASELINE Despite a decent recovery from the start of the year, the AUD has struggled in the midst of underlying negative risk sentiment, China’s continued struggles with Covid breakouts, and more recently the big slump in key commodities (Iron Ore & Coal). China’s economy is always a key focus for the AUD. While all major economies are expected to slow in 2022, China is expected to recover (monetary and fiscal policy very stimulative). The expected recovery has been a key focus for our previous bullish AUD bias, which worked out well until a few weeks ago. Our view was that China’s expected recovery would be enough to keep commodities like Iron Ore supported even while other commodities push lower on global demand concerns, but price action has proven us wrong on that assumption, with Iron Ore dropping close to 30% from the mid-June. The RBA stuck to a higher pace of tightening with a 50bsp hike on in August, but it wasn’t enough to provide the AUD with upside as the bank mentioned their policy is not on a pre-determined path and also expressed growing concerns about consumers. While Iron Ore prices stays pressured and covid lockdowns in China persists, we have a neutral bias for the AUD. POSSIBLE BULLISH SURPRISES Positive Covid developments in China (easing restrictions, more fiscal or monetary stimulus, or letting go of the covidzero policy) could trigger bullish reactions in the AUD. As a risk sensitive currency, catalysts that causes big bouts of risk on sentiment could trigger bullish reactions in the AUD. Any catalyst that triggers some recovery in Australia’s key commodity exports (China stimulus, lifting covid restrictions, new infrastructure projects in China, higher inflation fears) should be supportive for the AUD. With the RBA just getting started with their hiking cycle, there is scope for them to turn more aggressive, which means any overly hawkish triggers from their meeting this week could trigger some bullish reactions. POSSIBLE BEARISH SURPRISES Negative Covid developments in China (increasing restrictions or adding new ones) could trigger bearish reactions in the AUD. As a risk sensitive currency, catalysts that causes big bouts of risk off sentiment could trigger bearish reactions in the AUD. Any catalyst that triggers more downside in Australia’s key commodity exports (additional China restrictions, demand destruction fears, and additional news on recent centralized iron ore buyers) could be negative for the AUD. Despite CPI >6% we’ve recently heard typical stubbornly hesitant comments pushing back against aggressive tightening implied by STIRs. Thus, any overly dovish comments from the bank this week or simply failing to surprise with a bigger hike than what is priced can trigger bearish reactions in the AUD. BIGGER PICTURE The bigger picture outlook for the AUD is neutral for now, but that is largely dependent on what happens to China and whether key commodities like Iron Ore and Coal can stop their recent bleeding. Until the covid situation improves materially, and until commodities and China’s growth stabilizes, the AUD is best suited for short-term tradesin line with strong short-term sentiment. NZD FUNDAMENTAL OUTLOOK: NEUTRAL BASELINE Despite the RBNZ being one of the most hawkish central banks from 2021, it hasn’t been enough to provide any meaningful trending support for the NZD. The cyclical concerns for the global economy, alongside concerns from China regarding their struggles with their covid-zero policy as well as recent big falls in commodity prices has kept the NZD pressured. Even though the RBNZ is expecting to keep their hiking cycle intact as they proved at their July meeting, some mild economic concerns have been starting to show up in the recent data, something they alluded to in their statement as well by noting medterm downside risks for the economy. Recent data such as consumer and business confidence has confirmed this view. Furthermore, a big focus for the RBNZ’s aggressive policy (apart from high inflation of course) has been to try and calm down a very hot housing market, and even though the fall is small we have seen YY house prices cool starting to cool down. These developments on the growth side are not expected to stop the RBNZ’s hiking cycle just yet, but some market participants are expecting a more dovish tone reflecting these concerns and a push back in hike expectations in the months ahead, with some calling for a possible dovish shift potentially as soon as the August meeting coming up next week. POSSIBLE BULLISH SURPRISES Tactical positioning looksstretched, and trading at these levels it increases possibility of some mean reversion or position squaring which could trigger some upside in the NZD. Positive Covid developments in China (easing restrictions, more fiscal or monetary stimulus, or letting go of the covidzero policy) could trigger bullish reactions in the NZD. As a risk sensitive currency, and catalyst that causes big bouts of risk on sentiment could trigger bullish reactions in the NZD. With calls for the bank to potentially tilt more dovish, any outsized hike (75bsp) or aggressive push back against those expectations could offer some NZD upside. Any catalyst that triggers some recovery in commodity markets (China stimulus, lifting covid restrictions, new infrastructure projects in China, higher inflation fears; lower growth concerns) should be supportive for the NZD. POSSIBLE BEARISH SURPRISES Negative Covid developments in China (increasing restrictions or adding additional ones) could trigger bearish reactions in the NZD. As a risk sensitive currency, and catalyst that causes big bouts of risk off sentiment could trigger bearish reactions in the NZD. Since a lot of policy tightening has been priced into STIR markets, any negative catalysts that triggers less hawkish RBNZ expectations (faster deceleration in growth or inflation) could trigger downside for the NZD. Watch out for a lowering in OCR expectations at the upcoming meeting as some participants think the bank will announce a slow dovish pivot in the next few meetings. Any catalyst that triggers more downside in commodity markets (additional China restrictions, demand destruction fears, further growth concerns) could weigh on the NZD. BIGGER PICTURE The bigger picture outlook for the NZD is neutral for now, but that is largely dependent on what happens to China as the New Zealand economy is also very dependent on trade with China and Australia, and also dependent on whether the RNBZ sticks to their hawkish tone or pivots more dovish in the meetings ahead. Given the RBNZ’s current outlook, we would favour short-term opportunities in the NZD in line with short-term sentiment.
by thunderpips
1
EURAUD Bearish towards 1.40 but watch the 1D MA50The EURAUD pair has been following our long-term perspective as illustrated more than a month ago: As you see, the rejection on the 1D MA200 (orange trend-line) caused a strong sell sequence that came too close to testing the 1.4325 Support (April 05 Low). We remain well below the 1D MA50 (blue trend-line) with the RSI on Lower Highs. Within the multi-year Bearish Megaphone pattern that the pair has been trading in, there have been another two similar RSI patterns. The more recent (Oct - Nov 2021) managed to break above the 1D MA50 and reached almost its previous High/ Resistance. The older one (Jan 2021) got rejected on the 1D MA50 and reached as low as the 2.236 Fibonacci extension before rebounding. As a result, if you took our short suggested 1 month ago, you may take the profit and re-open it if last week's Low breaks and target at least the 2.236 Fib (1.400). If on the other hand the price closes above the 1D MA50, open a buy and target 1.5350. -------------------------------------------------------------------------------------------------------- ** Please support this idea with your likes and comments, it is the best way to keep it relevant and support me. ** --------------------------------------------------------------------------------------------------------
Short
by TradingShot
GBPAUD Strong buy on a monthly basisThe GBPAUD pair has started the week on a strong note, with the current 1W candle being the longest green (so far) since September 21 2020. That shows incredible buying sentiment especially following a 1W MACD Bullish Cross and the 1W RSI being on Higher Lows since April 04 2022. When the price is on Lower Lows, as is the case now, this is a Bullish Divergence potentially indicating a trend shift upwards. We saw the very same set of parameters align back in the July - December 2020 sequence. After a Support re-test, the price started a strong long-term uptrend above the 1.5 Fibonacci extension. If you are on this for the long-term, there are few better levels to buy and target the 1.5 Fib at 1.8340. -------------------------------------------------------------------------------------------------------- ** Please support this idea with your likes and comments, it is the best way to keep it relevant and support me. ** --------------------------------------------------------------------------------------------------------
Long
by TradingShot
AUDNZD Best short of the year!The AUDNZD pair is trading within a Channel Up since the start of May but has most likely peaked based on this unique pattern going back 8 years. The chart is on the 1W time-frame where the MACD is trading downwards after a late June Bearish Cross. As you see, every such Bearish Cross above the 0.0 MACD level, formed a long-term Top on either a Channel Up or Down pattern since 2014. All the downtrends that followed this peak formation were sharp sell-offs that dropped to at least the 1.0500 level (symmetrical Support) even though most reached a lot lower. As a result since we are still inside the Channel Up pattern, this could be the best place for a sell position this year. You can use three target levels: the 1W MA50 (blue trend-line) short-term, the 1W MA200 (orange trend-line) medium-term and the 1.0500 Symmetrical Support for the long-term. -------------------------------------------------------------------------------------------------------- ** Please support this idea with your likes and comments, it is the best way to keep it relevant and support me. ** --------------------------------------------------------------------------------------------------------
Short
by TradingShot
3
EURAUD: Very Bearish Outlook 🇪🇺 🇦🇺 Hey traders, Last week was very important for EURAUD pair: the price broke below a rising trend line and then closed below a key horizontal support. Even though the market is recovering now, I expect a bearish move from the confluence zone based on a trend line and a horizontal structure. Next goal - 1.435 ❤️If you have any questions, please, ask me in the comment section. Please, support my work with like, thank you!❤️
Short
by VasilyTrader
6
AUDCAD Important 1D MA200 test. Low risk trades around it.The AUDCAD pair has been on a strong rise since the July 13 Low on the 1 year Lower Lows zone. That was a buy signal that we posted exactly a month ago: The rebound has now reached the critical 1D MA200 (orange trend-line), which has been the Resistance in the past 3 months. The last Lower Low on January 28 2022, had a rally that did break above the 1D MA200 and only stopped (and got rejected) on the 1W MA300 (red trend-line). With the 1W RSI being on a rebound following its contact with its long-term Buy Zone, this is quite likely to happen again. As a result, a low risk trading approach right now is to buy only if we close above the 1D MA200 and target just before the price hits the 1W MA300. Until the break-out happens, we can take a short-term sell, targeting the 1D MA50 (blue trend-line). -------------------------------------------------------------------------------------------------------- Please like, subscribe and share your ideas and charts with the community! --------------------------------------------------------------------------------------------------------
by TradingShot
AUDJPY Low risk tradesThe AUDJPY pair has been trading within a bullish Channel for more than a year and is currently on the 1D MA50 (blue trend-line). The 1D RSI Lower Highs sequence prompts to the similar structure of November 2021 - February 2022, which made the pair break upwards when the RSI Lower Highs broke eventually. As a result, a similar RSI break-out should be enough to target the top of the bullish Channel around 99.000. However since the June 08 top, we see a shorter-term Channel Down forming with clear Lower Highs and Lower Lows. With the price that close to the Lower Highs, it offers excellent Risk/ Reward ratios both on the upside break-out and the rejection, which should target the Lower Lows trend-line above (or near) the 1D MA200 (orange trend-line). -------------------------------------------------------------------------------------------------------- ** Please support this idea with your likes and comments, it is the best way to keep it relevant and support me. ** --------------------------------------------------------------------------------------------------------
by TradingShot
1
AUD CHF - FUNDAMENTAL DRIVERSAUD FUNDAMENTAL OUTLOOK: NEUTRAL BASELINE Despite a decent recovery from the start of the year, the AUD has struggled in the midst of underlying negative risk sentiment, China’s continued struggles with Covid breakouts, and more recently the big slump in key commodities (Iron Ore & Coal). China’s economy is always a key focus for the AUD. While all major economies are expected to slow in 2022, China is expected to recover (monetary and fiscal policy very stimulative). The expected recovery has been a key focus for our previous bullish AUD bias, which worked out well until a few weeks ago. Our view was that China’s expected recovery would be enough to keep commodities like Iron Ore supported even while other commodities push lower on global demand concerns, but price action has proven us wrong on that assumption, with Iron Ore dropping close to 30% from the mid-June. The RBA stuck to a higher pace of tightening with a 50bsp hike on in August, but it wasn’t enough to provide the AUD with upside as the bank mentioned their policy is not on a pre-determined path and also expressed growing concerns about consumers. While Iron Ore prices stays pressured and covid lockdowns in China persists, we have a neutral biasfor the AUD. The only reason why we haven’t shifted to bearish is because some of the recent data out of China has been better than expected, thus there are still upside risks for the currency if things like Iron Ore can put in a base and show some recovery. POSSIBLE BULLISH SURPRISES Positive Covid developments in China (easing restrictions, more fiscal or monetary stimulus, or letting go of the covidzero policy) could trigger bullish reactions in the AUD. As a risk sensitive currency, catalysts that causes big bouts of risk on sentiment could trigger bullish reactions in the AUD. Any catalyst that triggers some recovery in Australia’s key commodity exports (China stimulus, lifting covid restrictions, new infrastructure projects in China, higher inflation fears) should be supportive for the AUD. With the RBA just getting started with their hiking cycle, there is scope for them to turn more aggressive, which means any overly hawkish triggers from their meeting this week could trigger some bullish reactions. POSSIBLE BEARISH SURPRISES Negative Covid developments in China (increasing restrictions or adding new ones) could trigger bearish reactions in the AUD. As a risk sensitive currency, catalysts that causes big bouts of risk off sentiment could trigger bearish reactions in the AUD. Any catalyst that triggers more downside in Australia’s key commodity exports (additional China restrictions, demand destruction fears, and additional news on recent centralized iron ore buyers) could be negative for the AUD. Despite CPI >6% we’ve recently heard typical stubbornly hesitant comments pushing back against aggressive tightening implied by STIRs. Thus, any overly dovish comments from the bank this week or simply failing to surprise with a bigger hike than what is priced can trigger bearish reactions in the AUD. BIGGER PICTURE The bigger picture outlook for the AUD is neutral for now, but that is largely dependent on what happens to China and whether key commodities like Iron Ore and Coal can stop their recent bleeding. Until the covid situation improves materially, and until commodities and China’s growth stabilizes, the AUD is best suited for short-term trades. CHF FUNDAMENTAL OUTLOOK: WEAK BULLISH BASELINE The CHF has been supported in recent months as STIR markets have steadily priced in higher interest rates for Switzerland, as well the SNB’s reluctance to intervene in the currency markets to try and weaken the CHF. At their June meeting, the SNB took a very aggressive policy step by hiking rates with 50bsp and removing their previous classification that the CHF is ‘highly valued’. Unlike other central banks, the SNB has chosen to try and tackle inflation before it runs rampant by hiking rates aggressively. Their hike in June was the first hike since 2007, and if the bank follows through with a hike in September it will mean Switzerland will have positive interest rates for the first time in almost a decade. There is scope for further CHF upside in the months ahead with 4 supporting drivers. SNB’s hawkish tilt, the bank’s acceptance of a stronger CHF with less intervention, negative underlying risk sentiment driven by the global cyclical slowdown, rising inflation. The SNB did note that they are willing to be active in the foreign exchange market to ensure appropriate monetary conditions which means too much CHF strength could get the wrong attention from the bank. POSSIBLE BULLISH SURPRISES Any incoming data (especially CPI on Wednesday) or SNB comments that causes markets to price in even more aggressive policy from the bank could trigger bullish reactions in the CHF. As a risk sensitive currency, and catalyst that causes big bouts of risk off sentiment could trigger bullish reactions in the CHF. The more aggressive markets think the ECB will be with incoming hikes, the more aggressive they will be for the SNB. Thus, data that trigger hawkish ECB expectations could also be supportive for the CHF. POSSIBLE BEARISH SURPRISES The SNB has not been as active in trying to devalue the CHF through sight deposits as they have been in recent years. With the bank now on a hiking cycle, any drastic appreciation could spark some intervention and would be a bearish catalyst. As a risk sensitive currency, and catalyst that causes big bouts of risk on sentiment could trigger bearish reactions in the CHF. Further lower repricing of ECB hikes could trigger downside in the CHF as well, and the biggest dovish risk for the currency is a big surprise miss on any incoming CPI data. BIGGER PICTURE The SNB surprised with a 50bsp hike and signalled, that unlike other central banks, they will not get behind the curve. Apart from a hawkish central bank, we also have the economy on a steady footing, as well as less risk of intervention as SNB’s Jordan said they no longer see the CHF as highly valued (there is of course risk that they could intervene if the CHF appreciates too much too fast). This means the bias for the CHF is bullish and we’re looking for dips as CHF for buying opportunities.
by thunderpips
AUDUSD short-term buyThe AUDUSD pair broke last week above its long-term Falling Wedge pattern and the 1D MA50 (blue trend-line) and has been consolidating ever since. With the 1D RSI on Higher Lows since May 02, which has been a Bullish Divergence, it is more likely that the rise will be resumed towards the 1D MA200 (orange trend-line) which has been the Resistance since April 22. -------------------------------------------------------------------------------------------------------- Please like, subscribe and share your ideas and charts with the community! --------------------------------------------------------------------------------------------------------
Long
by TradingShot
3
AUD CHF - FUNDAMENTAL DRIVERSAUD FUNDAMENTAL OUTLOOK: NEUTRAL BASELINE Despite a decent recovery from the start of the year, the AUD has struggled in the midst of underlying negative risk sentiment, China’s continued struggles with Covid breakouts, and more recently the big slump in key commodities (Iron Ore & Coal). China’s economy is always a key focus for the AUD. While all major economies are expected to slow in 2022, China is expected to recover (monetary and fiscal policy very stimulative). The expected recovery has been a key focus for our previous bullish AUD bias, which worked out well until a few weeks ago. Our view was that China’s expected recovery would be enough to keep commodities like Iron Ore supported even while other commodities push lower on global demand concerns, but price action has proven us wrong on that assumption, with Iron Ore dropping close to 30% from the mid-June. The RBA which finally started their hiking cycle has also failed to provide much support for the AUD, with recent comments suggesting the bank isn’t ready to confirm the aggressive number of hikes that STIR markets have already priced in. While Iron Ore prices stays pressured and covid lockdowns in China persists, we are moving our bias to neutral for the AUD. The only reason why we haven’t shifted to bearish is because the recent data out of China has been better than expected, and still poses upside risks for the currency if things like Iron Ore can put in a base and show some recovery. POSSIBLE BULLISH SURPRISES Positive Covid developments in China (easing restrictions, more fiscal or monetary stimulus, or letting go of the covidzero policy) could trigger bullish reactions in the AUD. As a risk sensitive currency, catalysts that causes big bouts of risk on sentiment could trigger bullish reactions in the AUD. Any catalyst that triggers some recovery in Australia’s key commodity exports (China stimulus, lifting covid restrictions, new infrastructure projects in China, higher inflation fears) should be supportive for the AUD. With the RBA just getting started with their hiking cycle, there is scope for them to turn more aggressive, which means any overly hawkish triggers from their meeting this week could trigger some bullish reactions. POSSIBLE BEARISH SURPRISES Negative Covid developments in China (increasing restrictions or adding new ones) could trigger bearish reactions in the AUD. As a risk sensitive currency, catalysts that causes big bouts of risk off sentiment could trigger bearish reactions in the AUD. Any catalyst that triggers more downside in Australia’s key commodity exports (additional China restrictions, demand destruction fears, and additional news on recent centralized iron ore buyers) could be negative for the AUD. Despite CPI >6% we’ve recently heard typical stubbornly hesitant comments pushing back against aggressive tightening implied by STIRs. Thus, any overly dovish comments from the bank this week or simply failing to surprise with a bigger hike than what is priced can trigger bearish reactions in the AUD. BIGGER PICTURE The bigger picture outlook for the AUD is neutral for now, but that is largely dependent on what happens to China and whether key commodities like Iron Ore and Coal can stop their recent bleeding. Until the covid situation improves materially, until commodities and China’s growth stabilizes, the AUD might struggle to maintain upside momentum. CHF FUNDAMENTAL OUTLOOK: WEAK BULLISH BASELINE The CHF has been supported in recent months as STIR markets have steadily priced in higher interest rates for Switzerland, as well the SNB’s reluctance to intervene in the currency markets to try and weaken the CHF. At their June meeting, the SNB took a very aggressive policy step by hiking rates with 50bsp and removing their previous classification that the CHF is ‘highly valued’. Unlike other central banks, the SNB has chosen to try and tackle inflation before it runs rampant by hiking rates aggressively. Their hike in June was the first hike since 2007, and if the bank follows through with a hike in September it will mean Switzerland will have positive interest rates for the first time in almost a decade. There is scope for further CHF upside in the months ahead with 4 supporting drivers. SNB’s hawkish tilt, the bank’s acceptance of a stronger CHF with less intervention, negative underlying risk sentiment driven by the global cyclical slowdown, rising inflation. The SNB did note that they are willing to be active in the foreign exchange market to ensure appropriate monetary conditions which means too much CHF strength could get the wrong attention from the bank. POSSIBLE BULLISH SURPRISES Any incoming data (especially CPI on Wednesday) or SNB comments that causes markets to price in even more aggressive policy from the bank could trigger bullish reactions in the CHF. Last week the SNB fired a warning shot for Wednesday’s CPI by saying they can take policy decisions at any time between regular meeting dates, so there is a risk that a big upside surprise in CPI on Wednesday triggers an inter-meeting hike. As a risk sensitive currency, and catalyst that causes big bouts of risk off sentiment could trigger bullish reactions in the CHF. The more aggressive markets think the ECB will be with incoming hikes, the more aggressive they will be for the SNB. Thus, data that trigger hawkish ECB expectations could also be supportive for the CHF. POSSIBLE BEARISH SURPRISES The SNB has not been as active in trying to devalue the CHF through sight deposits as they have been in recent years. With the bank now on a hiking cycle, any drastic appreciation could spark some intervention and would be a bearish catalyst. Last week the SNB fired a warning shot for CPI by saying they can take policy decisions at any time between regular meeting dates, and the CHF strengthened across the board on those comments. If CPI beats big this week but the SNB does not act it could show weakness and pressure the CHF. As a risk sensitive currency, and catalyst that causes big bouts of risk on sentiment could trigger bearish reactions in the CHF. Further lower repricing of ECB hikes could trigger downside in the CHF as well, and the biggest dovish risk for the currency is a big surprise miss on any incoming CPI data. BIGGER PICTURE The SNB surprised with a 50bsp hike and signalled, that unlike other central banks, they will not get behind the curve. Apart from a hawkish central bank, we also have the economy on a steady footing, as well as less risk of intervention as SNB’s Jordan said they no longer see the CHF as highly valued (there is of course risk that they could intervene if the CHF appreciates too much too fast). This means the bias for the CHF is bullish and we’re looking for dips as CHF for buying opportunities.
by thunderpips
2